Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.

Duties

Financial managers typically do the following:

  • Prepare financial statements, business activity reports, and forecasts
  • Monitor financial details to ensure that legal requirements are met
  • Supervise employees who do financial reporting and budgeting
  • Review company financial reports and seek ways to reduce costs
  • Analyze market trends to find opportunities for expansion or for acquiring other companies
  • Help management make financial decisions

The role of the financial manager, particularly in business, is changing in response to technological advances that have substantially reduced the amount of time it takes to produce financial reports. Financial managers’ main responsibility used to be monitoring a company’s finances, but they now do more data analysis and advise senior managers on ideas as to how to maximize profits. They often work on teams, acting as business advisors to top executives.

Financial managers also do tasks that are specific to their organization or industry. For example, government financial managers must be experts on government appropriations and budgeting processes, and healthcare financial managers must know about issues in healthcare finance. Moreover, financial managers must be aware of special tax laws and regulations that affect their industry. For more information on chief financial officers, see the profile on top executives.

The following are examples of types of financial managers:

Controllers direct the preparation of financial reports that summarize and forecast the organization’s financial position, such as income statements, balance sheets, and analyses of future earnings or expenses. Controllers also are in charge of preparing special reports required by governmental agencies that regulate businesses. Often, controllers oversee the accounting, audit, and budget departments of their organization.

Treasurers and finance officers direct their organization’s budgets to meet its financial goals. They oversee the investment of funds and carry out strategies to raise capital (such as issuing stocks or bonds) to support the firm’s expansion. They also develop financial plans for mergers (two companies joining together) and acquisitions (one company buying another).

Credit managers oversee their firm’s credit business. They set credit-rating criteria, determine credit ceilings, and monitor the collections of past-due accounts.

Cash managers monitor and control the flow of cash that comes in and goes out of the company to meet the company’s business and investment needs. For example, they must project cash flow (amounts coming in and going out) to determine whether the company will not have enough cash and will need a loan or will have more cash than needed and so can invest some of its money.

Risk managers control financial risk by using hedging and other strategies to limit or offset the probability of a financial loss or a company’s exposure to financial uncertainty. Among the risks they try to limit are those due to currency or commodity price changes.

Insurance managers decide how best to limit a company’s losses by obtaining insurance against risks such as the need to make disability payments for an employee who gets hurt on the job and costs imposed by a lawsuit against the company.

Work Environment: 

Financial managers held about 532,100 jobs in 2012. They work in many industries, including banks and insurance companies. They work closely with top executives and with departments that develop the data financial managers need.

The industries that employed the most financial managers in 2012 were as follows:

Finance and insurance 28%
Management of companies and enterprises 10
Professional, scientific, and technical services 10
Manufacturing 8
Government 8

Work Schedules

Most financial managers work full time, and many work long hours.

Education and Training: 

Financial managers typically have a bachelor’s degree and 5 years or more of experience in another business or financial occupation, such as loan officer, accountant, auditor, securities sales agent, or financial analyst.

Education

A bachelor's degree in finance, accounting, economics, or business administration is often the minimum education needed for financial managers. However, many employers now seek candidates with a master’s degree, preferably in business administration, finance, or economics. These academic programs help students develop analytical skills and learn financial analysis methods and software.

Licenses, Certifications, and Registrations

Professional certification is not required, but some financial managers still get it to demonstrate a level of competence. The CFA Institute confers the Chartered Financial Analyst (CFA) certification to investment professionals who possess at least a bachelor’s degree, have 4 years of work experience, and pass three exams. The Association for Financial Professionals confers the Certified Treasury Professional credential to those who pass an exam and have a minimum of 2 years of relevant experience.

Work Experience in a Related Occupation

Financial managers usually have experience in another business or financial occupation, such as loan officer, accountant or auditor, securities sales agent, or financial analyst. 

In some cases, companies provide formal management training programs to help prepare highly motivated and skilled financial workers to become financial managers.

Important Qualities

Analytical skills. Financial managers increasingly are assisting executives in making decisions that affect their organization, a task for which these managers need analytical ability.

Communication skills. Excellent communication skills are essential because financial managers must explain and justify complex financial transactions.

Detail oriented. In preparing and analyzing reports such as balance sheets and income statements, financial managers must pay attention to detail.

Math skills. Financial managers must be skilled in math, including algebra. An understanding of international finance and complex financial documents also is important.

Organizational skills. Financial managers deal with a range of information and documents and so must stay organized to do their jobs effectively.

Pay: 

The median annual wage for financial managers was $109,740 in May 2012. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $59,630, and the top 10 percent earned more than $187,200.

In May 2012, the median annual wages for financial managers in the top five industries in which these managers worked were as follows:

Professional, scientific, and technical services $130,120
Management of companies and enterprises 124,840
Finance and insurance 108,690
Manufacturing 107,730
Government 102,270

Most financial managers work full time, and many work long hours.

Job Outlook: 

Employment of financial managers is projected to grow 9 percent from 2012 to 2022, about as fast as the average for all occupations. However, growth will vary by industry.

Services provided by financial managers, such as planning, directing, and coordinating investments, will continue to be in demand as the economy grows. The United States remains an international financial center, meaning that the economic growth of countries around the world will likely contribute to employment growth in the U.S. financial industry. In recent years, companies have been accumulating more cash on their balance sheets. This will lead to demand for financial managers, as companies will be in need of cash management expertise.

Overall growth of employment for financial managers will be limited by slower expected growth in depository credit intermediation. This industry includes commercial banking and savings institutions, and employs a large percentage of these managers. From 2012 to 2022, employment of financial managers is projected to grow 5 percent in the depository credit intermediation industry.

Job Prospects

As with other managerial occupations, jobseekers are likely to face competition because the number of job openings is expected to be fewer than the number of applicants. Candidates with expertise in accounting and finance—particularly those with a master's degree or certification—should enjoy the best job prospects. An understanding of international finance and complex financial documents is important.

For More Information: 

For more information about financial managers, including certification, visit

Financial Management Association International

For information about careers in financial and treasury management and the Certified Treasury Professional program, visit

Association for Financial Professionals

For information about the Chartered Financial Analyst program, visit

CFA Institute

Source: Bureau of Labor Statistics, U.S. Department of Labor, 2014–2015 Occupational Outlook Handbook, http://www.bls.gov/ooh.

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